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How Do You Pay Estate Agent Fees?

Property Saviour » Estate Agents » How Do You Pay Estate Agent Fees?

Estate agent costs can vary, so it is essential to know what exactly you are paying for when you are selling your property. To make it easier for you, we have outlined all the information you need to consider and all the factors that may influence how much you will end up paying.

Price plays a significant role for many property sellers in the current market.

It’s understandable to be drawn to the least expensive option, but you should choose an estate agent that is most suitable for you and obtain quotes from three or four reliable agents for peace of mind.

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When are estate agent fees paid?

Estate agents must tell you what is included in their fees, which are due upon the sale of the property and exchange of contracts. Some agents may ask for payment in advance. Your estate agency agreement will say when fees need to be paid.

Your solicitor will usually handle the agent’s invoice and pay it out of your sale proceeds. Make sure you know when the payment is due and that your agency allows a few days for the money to be transferred before they start charging interest.

Estate agents will give you a grace period of 5-10 days for making payment before interest is applied. This information will be in your contract.

Who pays the estate agent fees? 

The seller pays estate agent fees.  Once the estate agents have finished their job, they will expect their invoices to be paid. This is usually taken care of by your conveyancing solicitor from the proceeds of sale.

Afterwards, any fees and disbursements will be deducted from the net proceeds of the sale, which includes any agent fees. The remaining amount will be returned to you.

How do you pay estate agent fees
Estate agents will give you a grace period of 5-10 days for making payment before interest is applied. This information will be in your contract.

Types of estate agent fees

These are different types of estate agent fees:

Commission Fees

Some agents will charge a commission for their services, a percentage of the agreed sale price. The cost of this fee can vary greatly depending on the property’s price for sale.

This fee usually covers a realistic property valuation based on local market research, trends and past sales data; accurate floorplans and measurements; professional photographs; the installation and removal of a ‘for sale’ and ‘sold’ board sign; assisted viewings; online marketing of your property; and negotiation costs.

Fixed Fees

A fixed fee is a set price for an estate agent’s service. There could be a choice of packages available, with varying levels of service and different price points.

Prices usually start at around £800 but could be more expensive if you opt for added extras, such as a floor plan or assisted viewings.

Estate agents may also allow you to pay upfront or defer the fixed fee payment. Deferring the payment may seem attractive, but it comes with conditions.

If you decide to defer, a loan agreement will be created with a third-party financial advisor, and you may incur additional costs, such as interest. Could you make sure you understand what is included before signing the agreement?

What to ask your estate agent about fees
Your contract is likely to include a tie-in period, which locks you into an estate agency agreement for a minimum amount of time (typically four to twelve weeks).

What to ask your estate agent about fees?

There are lots of questions you should ask your agent if you’re a first-time seller.

Here are the basics when it comes to costs:

  • What’s included in your estate agency fee?
  • Does the quote include VAT?
  • Will you provide floor plans and professional photos of my house, and is there an additional cost for this?
  • Will you put up a ‘for sale’ board, and do I have to pay additional for this?
  • Do I have to pay extra for marketing?
  • Where will you advertise my property?
  • How many websites will my property be featured on?
  • Are there any additional fees for ‘enhanced’ listings or being a ‘featured property’ on Rightmove/Zoopla, etc.?
  • Are there any other costs I should be aware of?

Your Estate Agent Contract

Your contract is likely to include a tie-in period, which locks you into an estate agency agreement for a minimum amount of time (typically four to twelve weeks). If you wish to terminate the contract during this time frame, you may incur a fee.

To avoid this, check to see if your contract allows you to end the agreement without penalty. If not, discuss it with your agent – they may be willing to negotiate.

Withdrawal Fee

Another expense to bear in mind is the withdrawal fee. This may be charged if you decide to take your house off the market within a specific timeframe.

Additionally, be aware of contracts with a ‘ready, willing and able purchaser’ clause. This means you must pay a sum regardless of whether the property sells.

If you decide to employ more than one estate agent, check the small print to ensure this is allowed. If the contract mentions ‘sole selling rights’, then only that agent is allowed to sell your home during the specified period.

Even if you find your buyer, you must still pay the agent. ‘Sole agency’ works similarly, but you don’t have to pay the estate agent if you find your buyer.

It’s vital to read your contract in full before committing to any terms. Some estate agents offer additional services, such as in-house conveyancers or solicitors, which will be charged separately.

Make sure you have a written copy of the prices (including VAT) and when payment is due.

What Are Estate Agent Added Fees
Optional extras, such as featured or premium listings and enhanced marketing packages, can also cost extra.

Added Fees

Your agent may ask if you want them to arrange an Energy Performance Certificate (EPC) assessment, which must be for a property every ten years. You can arrange this yourself, or ask the agent to do it – though it may be more expensive.

Optional extras, such as featured or premium listings and enhanced marketing packages, can also cost extra. Think of the value it will add to your listing before deciding to add it to your contract.

Thinking of selling your home?

If you need to sell your house without incurring any fees, Property Saviour offers a real alternative to the estate agents. By making you a cash offer, you can sell in 10 days or at a timescale that works for you.

Get in touch with us today!

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